How do you explain the difference between a business model and business plan? I recently tried and struggled to explain. Found this excellent post by Steve Blank here.
A business plan is the execution document that existing companies write when planning product-line extensions where customer, market and product features are known. The plan is an operating document describes the execution strategy for addressing these “knowns.”
Entrepreneurs treat a business plan, once written, as the culmination of everything they know and believe. All they need to do is add money and magically that five-year forecast in Appendix A will simply happen if they execute to the plan.
A business model describes how your company creates, delivers and captures value. A business model is designed to change rapidly to reflect what you find outside the building in talking to customers. It’s dynamic and it reflects the iterative reality that businesses face.